What Is Most Likely to Happen If a Firm Relies

question 47

Multiple Choice

What is most likely to happen if a firm relies too long on a competency without honing, refining, and upgrading as the firm and the environment change?

• A) The firm's original core competency can turn from a liability into an asset.
• B) The firm's organizational inertia can turn into its core rigidity.
• C) The firm's competitive parity can turn into its competitive advantage.
• D) The firm's culture can turn from a core competency into a core rigidity.

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Definitions:

Return On Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing net profit by the cost of the investment.

Sales To Invested Assets

A financial ratio that measures how efficiently a company uses its invested assets to generate sales.

Residual Income

The amount of net income generated beyond the minimum rate of return or benchmarks set by a business or investor.

Minimum Acceptable Return

The lowest return on investment that a manager or investor is willing to accept, often used in capital budgeting and investment planning.